Full Judgment Text
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CASE NO.:
Appeal (civil) 4662-4663 of 1999
PETITIONER:
V.M. Salgaocar & Bros.
RESPONDENT:
Board of Trustees of Port of Mormugao & Anr
DATE OF JUDGMENT: 31/03/2005
BENCH:
ASHOK BHAN & A.K. MATHUR
JUDGMENT:
J U D G M E N T
BHAN, J.
These appeals by grant of leave are directed against the common
judgment and order of affirmation passed by the High Court of Bombay
at Goa in First Appeal No.27 of 1992 and appeal from order No.69 of
1991. The suit filed by the plaintiff-appellant (hereinafter referred to as
’the appellant’) was dismissed by the District Judge, South Goa,
Mormugao by judgment dated 30th December, 1991 on the ground that
the same was not maintainable for want of notice under Section 120 of
the Major Port Trust Act, 1963 (hereinafter referred to as ’the Act’) and
that the suit was barred by limitation. This judgment was challenged in
First Appeal No.27 of 1992. Prior to that District Judge vide order dated
30th April, 1991, had come to the conclusion that Section 120 of the Act
was applicable to the present case. Against this order the appellant had
filed an appeal from order 69 of 1991. The two appeals having arisen
from the same suit were heard together and disposed of by the High
Court by a common judgment. We propose to do the same.
We would referring to the facts necessary to dispose of the appeals
as found by the High Court on which there is no dispute between the
counsel for the parties.
Loading operation in relation to iron ore at Mormugao Port was
sought to be regulated by the Mormugao Port (Shipment of Ore and
Pellets from Mechanised Ore Handling Plant at berth no.9 and related
matters) Regulations, 1979. Respondent No.1-The Board of the Trustees
of Mormugao (hereinafter referred to as ’the Board’) was empowered to
divide the storage area into plots of a size sufficient to hold
approximately the quantity required to be loaded and to stipulate
minimum tonnage turn over for each plot to qualify for allotment of plot.
The appellant who is engaged in exporting iron ore were also allotted
one such plot. Rates were prescribed per tonne of iron ore, handled
through Mechanised Ore Handling Plan (MOPH) and revised from time
to time. By a notification dated 26th October, 1983, the Board increased
the handling rate to Rs.28.22 per tonne and fixed minimum rental
surcharge of Rs.8.80 per tonne. The Board did this to ensure proper
utilisation of berth and MOPH as it was found that there was under
utilisation of the same by exporters. The justification for imposing the
surcharge of Rs.8.80 per tonne was that the Board had to pay Rs.260.30
lakhs to the contractors for dredging a channel and widening the
channel, so that all sea going vessels could use berth no.9. It is further
the Board’s case that Rs.7.16 lakhs towards income tax and Rs.20.00
lakhs towards estimated liability arising out of the contract labour
legislation had to be disbursed. As the Board had incurred heavy losses
on account of level of utilisation of MOPH between Rs.55.00 lakhs
tonnes to 60.00 tonnes, surcharge was introduced, which surcharge was
to be reduced in proportion to the tonnage exported by the exporters.
This surcharge was subject to rebate for the plot allottee holding the plot
for minimum period of one year on the following pattern:-
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On achieving a level of turnover
Rebate (Rs. Per tonne)
6.25 times of nominal plot capacity
1.00
6.50 times of nominal plot capacity
2.00
6.75 times of nominal plot capacity
3.00
7.00 times of nominal plot capacity
4.00
7.25 times of nominal plot capacity
5.20
7.50 times of nominal plot capacity
6.40
7.75 times of nominal plot capacity
7.60
8.00 times of nominal plot capacity
8.80
Appellant had challenged the levy of surcharge of Rs.8.80 per
tonne being illegal, without jurisdiction null and void as it was not co-
related to any service rendered by the Board and that the levy was falling
outside the purview of Section 48 of the Act. The High Court rejected
the said challenge relying upon a judgment of this Court in M/s. V.S.
Dempo & Co. Pvt. Ltd. Vs. Board of Trustees and Another [1994
Suppl. (2) SCC 349]. An exporter had earlier challenged the levy of
surcharge with graded system of rebates in a writ petition before the
High Court. The writ petition was dismissed and the order of the High
Court was upheld in appeal filed by the writ petitioner. In view of the
fact that the power to levy surcharge had already been upheld by this
Court the counsel for the appellant did not argue this point before us.
Appellant’s case further is that in the event the validity of levy of
surcharge is upheld, the action of the Board for refusing full rebate to the
appellant and in collecting surcharge of Rs.7.80 is illegal, arbitrary,
unreasonable, contrary to the Act and Rules and Regulations as well as
Article 14 of the Constitution on the ground that the surcharge of
Rs.7.80 per tonne has been levied without taking into consideration
lapses on the part of the Board as well as non-consideration of shortfall
in export of the appellant’s due to the factors beyond their control. The
appellant had also raised dispute relating to the extent of alleged storage
plot and the turnover required to be achieved by the appellant during the
year to be eligible for full rebate under Notification dated 26th October,
1983. According to the appellant it was entitled to the full rebate on
8,66,192 metric tonnes. The lapses pointed out on the part of the Board
were stated to be failure of its obligation by providing barge unloaders to
the appellant, commensurate with the appellant’s export commitments,
insufficient barge allocation, break-down of reclaimer no.2, port and
dock workers strike etc. According to the appellant, considering the plot
capacity of 1,08,274 tonnes, the turnover of 8,66,192 metric tonnes
would entitle the appellant a full rebate at the rate of Rs.8.80 per tonne
which comes to Rs.62,46,548.10 paise, instead of Rs.7,09,835/-, which
the Board had agreed to pay. As per appellant, it had in fact exported
through berth no.9, 10,52,910 tonnes and even if nominal capacity of the
plot was taken as 1,50,000 tonnes, the appellant would be entitled for
full rebate at the rate of Rs.8.80 per tonne, having turned over its plot of
1,50,000 tonnes. This calculation was based upon the appellant’s plea
that they must be deemed to have exported through berth no.9,
3,14,000 tonnes, which the appellant was prevented from loading
through berth no.9 due to insufficient barge allocations, break-down of
reclaimer no.2 and port and dock workers strike, which amounted to
90,000 tonnes, 70,000 tonnes and 1,54,000 tonnes respectively, thus
totalling 3,14,000 tonnes. Alternatively, the appellant claim that the
Board had committed breach of statutory duty by failing to provide
adequate barrage unloading timings as prescribed by the regulations and
by refusing to permit them to load its vessels by trans shippers when the
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reclaimer of the Board was broken down.
Another challenge put by the appellant was that, the suit against
Central Government or the State Government could be filed within 3
years after giving notice under Section 80 of Code of Civil Procedure.
The provision of shorter period of limitation of 6 months under Section
120 of the Act to the Board and its officers who are performing duties
and functions similar to the Union and the State Government was
irrational, unreasonable and unrelated to the object sought to be achieved
by the Act and as such, Section 120 of the Act was unconstitutional and
violative of the fundamental rights guaranteed by Article 14 of the
Constitution. It was further pleaded that in case the Court finds that
Section 120 of the Act was valid, letter dated 12th April, 1984 addressed
by it to the defendant Board, be treated as notice under Section 120 of
the Act. In short, the appellant prayed for a declaration that the
minimum rental surcharge levied by Notification dated 26th October,
1983 bearing No.3-GA(8)/83 issued by the Board be declared as illegal,
unconstitutional, null and void; to declare the recovery to the tune of
Rs.62,46,548.10 paise as illegal being unconstitutional, null and void;
and to pay damages/compensation being equivalent to full rebate
aggregating to the sum of Rs.62,46,548.10 paise and to declare Section
120 of the Act as unconstitutional, null and void.
Another fact which needs to be mentioned is that the Board had
admitted in their letter dated 6th April, 1984 that the appellant was
entitled to receive rebate of Rs.7,09,835/- as the appellant had turned
over the plot for 6.39 times and were ready and willing to pay over the
said amount of Rs.7,09,835/- to the appellant. In view of the admission
made by the Board, the appellant sought judgment on admission for the
said sum of Rs.7,09,835/- under Order 12, Rule 6 of C.P.C. The Board
in its reply to the application under Order 12, Rule 6 stated that the
Board had no objection to the passing of a decree for Rs,7,09,835/- in
favour of the appellant but objected to the payment of 18% interest on
the said amount with effect from 6.4.84. In this view of the matter, by
judgment on admission under Order 12, Rule 6 C.P.C. dated 12.8.87 the
appellant’s claim to the tune of Rs.7,09,835/- was decreed. The question
of payment of interest and costs was left to be decided at the time of
final disposal of the suit.
The Board in its defence took up the plea that the appellant had
achieved turnover of only 6.25 times the nominal capacity of the plot
and was entitled to the rebate of only Re.1/- per tonne and that the
surcharge of Rs.7.80 per tonne was neither illegal nor unconstitutional.
The allegations relating to deemed export claimed by the appellant, was
denied. It was pleaded that since no notice under Section 120 of the Act
had been given by the appellant to the Board the suit was not
maintainable. It was further pleaded that the suit which had been filed
beyond the period of 6 months from the date of accrual of cause of
action, was barred by limitation permitted under Section 120 of the Act.
On the pleadings of the parties numbers of issues were framed. In
view of the finding recorded on issues No.12, 13 and 15 which were
answered in favour of the Board, the suit was dismissed. Issues Nos.12,
13 and 15 are as under:-
"12. Whether the suit is not maintainable for want
of notice under Section 120 of the Major Port
Trusts Act, 1963?
13. Whether the suit is barred by the provisions of
Section 120 of the Major Port Trusts Act, 1963?
15. Whether the plaintiff proves that Section 120 of
the Major Port Trusts Act is not applicable, to
this case and, if it is applicable, it is
unconstitutional and illegal?"
By order dated 30th July, 1991, first part of issue No.15 was
decided in the negative and the appellant’s contention that Section
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120 of the Act is not attracted, was rejected and it was held that
Section 120 was applicable.
Against this part of the order, the appellant had filed appeal from
order which was numbered as 69 of 1991. The second part of issue
No.15, 12 and 13 were decided by the impugned judgment delivered on
30th December, 1991, which was the subject matter of challenge in First
Appeal 27 of 1991.
Before the High Court following 3 points were canvassed for
determination:-
1. When no objection relating to limitation was raised in relation
to the part decree passed on admission under Order 12, Rule 6
C.P.C., whether the defendant Board could raise objection
relating to limitation in respect of the remaining amount
claimed by the appellants and part of the suit could be
dismissed on the ground of limitation?
2. Whether Section 120 of the said Act is applicable and if the
answer is in the affirmative, whether letter dated 12.4.84 can be
treated as notice under Section 120 of the said Act and further
whether the suit is barred by limitation thereunder?
3. Whether Section 120 of the said Act is unconstitutional?
The High Court answered all the three questions in favour of the
respondent by holding that the respondent did not waive the plea of
limitation for the remaining amount of Rs.55,36,710.10 paise. That
Section 120 was applicable to the present case. The letter dated
12.04.1984 addressed by the appellant to the respondents could not be
considered as a notice under Section 120 of the Act and that Section 120
of the Major Port Trust Act, 1963 was constitutionally valid. The High
Court affirmed the judgment of the District Judge regarding the legality
and constitutional validity of Section 120 and rejected the contention put
forth by the appellant’s counsel that by prescribing the limitation of 6
months against the Board and its employees as against the period of 3
years in respect of suits against the Government or Government Officers
for an act or order passed in discharge of official capacity was violative
of Article 14 of the Constitution. It was held that the suit was barred by
time having been filed beyond the period of limitation provided under
the Act and the same was also not maintainable for want of service of
notice.
During the course of arguments Shri R.F. Nariman, learned senior
counsel for the appellant had conceded the first part of point no.2 framed
by the High Court to the effect that Section 120 of the Act was
applicable to the present case and made his submissions on point no.1,
the second part of point no.2 and point no.3 In the written note
submitted on behalf of the appellant, the appellant has confined his
submissions to point nos.1 and 3 only. Since the second part of point
no2 goes to the root of the matter regarding maintainability of the suit
and its being barred by limitation we would deal with the same.
Point No.1
Although we have already narrated the factual matrix giving rise to
the dispute but it would be necessary to refer to few facts in order to
decide point no.1. The respondent port trust commissioned a
Mechanised Ore Handling Plan (hereinafter referred to as "MOPH") at
berth no.9 at Mormugao and prescribed rates for handling ore at MOPH.
On 28.10.1983 the Board issued a notification increasing the rates
levying surcharge and prescribing a rebate on the basis of achieving a
particular turnover. It is during this period that the issue arose as to the
actual plot capacity handed over to the appellant and whether a particular
turnover on the plot was achieved. According to the appellant,
considering plot capacity of 1,08,274 tonnes, the turnover of 8,66,192
metric tonnes would entitle the appellant to full rebate at the rate of
Rs.8.80 per tonne, which would come to Rs.62,46,548.10 paise, instead
of Rs.7,09,835/- which the respondent Board had agreed to give. The
respondent Board informed the appellant that they had turned around the
plot only 6.25 times on the basis of the plot capacity of 1.5 lakh tonnes
and were therefore entitled to rebate of Rs.7,09,835/- only. On
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12.04.1984 the appellant represented to the port trust and demanded full
rebate @ Rs.8.80 per tonne. Port trust by its letter dated 16.06.1984
refused to grant the full rebate as claimed by the appellant.
On 11.09.1986 the appellant filed Civil Suit No.55/1986 for
various reliefs referred to in the earlier part of the judgment. Port trust
on 14.02.1997 filed its written statement raising the plea of limitation
and failure to give statutory notice as per Section 120 and also denying
the claim on merits. The appellant made an application under Order 12
Rule 6 for the decree on admission in view of the port trust’s letter dated
16.06.1984 referred to above. The appellant had claimed interest @
18% on the amount due from the date the amount became payable till its
actual payment. The port trust in reply to the application under Order 12
Rule 6 admitted the claim of Rs.7,09,835/- but denied its liability to pay
any interest on the said amount. The Trial Court on 12.08.1987 passed a
decree on admission with regard to the sum of Rs.7,09,835/- leaving the
question of interest on the aforesaid amount open which was to be
decided at the time of the adjudication of the main suit. The main suit
was dismissed by the District Judge as being barred by time and not
maintainable for want of notice.
Counsel for the appellant has contended that the port trust in its
reply to application under Order 12 Rule 6 while admitting the claim did
not raise any objection as to the plea of limitation or statutory notice.
That on the passing of the decree on admission under Order 12 Rule 6 on
12.08.1987, the respondent Board was estopped from urging the point of
limitation or statutory notice. The said issue would be deemed to have
been waived. That statutory notice under Section 120 and issue of
limitation being the rights created in favour of the Board could be
waived by the Board. Since the decree on admission under Order 12
Rule 6 of the Code of Civil Procedure was passed without any
reservation being made to the issuance of statutory notice or limitation,
the Board is estopped from raising such a plea at this stage. It is further
submitted that the issue of waiver of limitation and statutory notice was
raised by the appellant before the High Court and the same has been
adjudicated upon by the High Court, the objection now raised by the
counsel for the respondents that waiver had not pleaded was untenable.
It was submitted that the dismissal of the suit on the ground of being
barred by limitation under Section 120 and for want of statutory notice
under Section 120 of the Act by the High Court was clearly erroneous.
Per contra, learned counsel for the respondent Board submitted
that the High Court has taken the correct view in holding that there was
no waiver of limitation by the respondent Board regarding the remaining
claim of the appellant. The mere fact that the suit was partly decreed
would not preclude the respondent Board from raising the plea of
limitation regarding the balance claim put forward by the appellant. It
was argued that the Board had not waived the plea of limitation for the
remaining claim of Rs.55,36,710.10 paise; that limitation under the
Limitation Act cannot be waived and even if a limitation is waived by a
party, it cannot give the jurisdiction to the Court to entertain a time
barred suit. That the appellant had never pleaded waiver and therefore,
the same cannot be urged by the appellant. Merely because the Board
had agreed to pay the admitted amount due to the appellant @ Re.1/- per
tonne it would not amount to waiver of the plea of limitation giving
jurisdiction to the Court to try a time barred suit.
Section 3 of the Limitation Act reads:-
"Section 3 \026 Bar of limitation - (1) Subject to the
provisions contained in sections 4 to 24 (inclusive), every
suit instituted, appeal preferred, and application made after
the prescribed period shall be dismissed although
limitation has not been set up as a defence.
(2) For the purposes of this Act \026
(a) a suit is instituted \026
(i) in an ordinary case, when the plaint is
presented to the proper officer;
(ii) in the case of a pauper, when his application
for leave to sue as a pauper is made; and
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(iii) in the case of a claim against a company
which is being wound up by the court, when
the claimant first sends in his claim to the
official liquidator;
(b) any claim by way of a set off or a counter claim,
shall be treated as a separate suit and shall be
deemed to have been instituted -
(i) in the case of a set off, on the same date as
the suit in which the set off is pleaded;
(ii) in the case of a counter claim, on the date
on which the counter claim is made in court;
(c) an application by notice of motion in a High
Court is made when the application is presented to
the proper officer of that court."
The mandate of Section 3 of Limitation Act is that it is the duty of
the Court to dismiss any suit instituted after the prescribed period of
limitation irrespective of the fact that limitation has not been set up as a
defence. If a suit is ex-facie barred by the Law of Limitation, a Court
has no choice but to dismiss the same even if the defendant intentionally
has not raised the plea of limitation.
This Court in Manindra Land & Building Corporation Ltd.
Vs. Bhutnath Banerjee and others reported in AIR 1964 SC 1336
held (para 9):-
"Section 3 of the Limitation Act enjoins a Court to dismiss
any suit instituted, appeal preferred and application made,
after the period of limitation prescribed therefor by
Schedule I irrespective of the fact whether the opponent had
set up the plea of limitation or not. It is the duty of the
Court not to proceed with the application if it is made
beyond the period of limitation prescribed. The Court had
no choice and if in construing the necessary provision of the
Limitation Act or in determining which provision of the
Limitation Act applies, the subordinate Court comes to an
erroneous decision, it is open to the Court in revision to
interfere with that conclusion as that conclusion led the
Court to assume or not to assume the jurisdiction to proceed
with the determination of that matter."
A perusal of paragraph 13 of the plaint shows that the lis between
the parties is, the refusal of rebate of corresponding levy of surcharge to
the extent or Rs.7.80 per metric tonne aggregating to Rs.55,36,710.10
paise for the year April, 1983 to March, 1984. By agreeing to pay
Rs.7,09,835/- which the respondent Board was always ready and willing
to pay, would not affect the Board’s legal contention regarding the claim
of Rs.55,36,710.10 paise being not maintainable in the absence of a
notice under Section 120 of the Act. Order 12 Rule 6 empowers the
Court where an admission of fact is made either in the pleadings or
otherwise, whether orally or in writing to make such order or such
judgment as it thinks fit either on the application of a party or on its own
motion and without waiting for the determination of any other questions
between the parties. Therefore, by passing a decree on admission under
Order 12 Rule 6 it cannot be said that there was any determination of the
question of limitation or maintainability of the suit. Simply because the
Board had agreed to pay the sum of Rs.7,09,835/- as committed by them
in their letter dated 06.04.1983 would not mean that the Board had given
up the determination of the question of limitation or the maintainability
of the suit for want of statutory notice.
The appellant had at no stage of proceedings had pleaded waiver
of the plea of limitation or of the giving of the notice under Section 120
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of the Act. The plaint was filed on 01.09.1986, Board had filed its
written statement raising objections of limitations and maintainability of
the plaint for want of notice on 18.02.1987. Application for decree on
admission was filed on 12.04.1987 and reply to the said application was
filed by the Board on 18.07.1987. The decree on admission was passed
by the Trial Court for the sum of Rs.7,09,835/- on 12.08.1987. After the
framing of issues and after an application was made to try issues no.12
and 13 as preliminary issues on 22.12.1989, an application was filed by
the appellant to amend the plaint. On 06.01.1990, a further application
was filed by the appellant for further amendment of the plaint. Even
though, the plaint was exhaustively amended after the decree on
admission, plea of waiver was not taken in the plaint. The point
regarding waiver was not argued before the Trial Court at any stage and
even in the memo of appeal filed before the High Court ground of
waiver was not taken. The question of waiver was taken up for the first
time at arguments stage before the High Court. The respondent Board
objected to the taking of the said point before the High Court for the first
time during the course of arguments. This Court in M/s. Motilal
Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and others
[(1979) 2 SCC 409] has held that waiver is a question of fact and it must
be properly pleaded and proved. No plea of waiver can be allowed to be
raised unless it is pleaded. This Court observed in para 5 as follows:-
"We shall first deal with the question of waiver since that can
be disposed of in a few words. The High Court held that
even if there was an assurance given by respondent 4 on
behalf of the State Government and such assurance was
binding on the State Government on the principle of
promissory estoppel, the appellant had waived its right under
it by accepting the concessional rates of sales tax set out in
the letter of respondent 5 dated January 20, 1970. We do not
think this view taken by the High Court can be sustained. In
the first place, it is elementary that waiver is a question of fact
and it must be properly pleaded and proved. No plea of
waiver can be allowed to be raised unless it is pleaded and the
factual foundation for it is laid in the pleadings. Here it was
common ground that the plea of waiver was not taken by the
State Government in the affidavit filed on its behalf in reply
to the writ petition, nor was it indicated even vaguely in such
affidavit. It was raised for the first time at the hearing of the
writ petition. That was clearly impermissible without an
amendment of the affidavit in reply or a supplementary
affidavit raising such plea. If waiver were properly pleaded
in the affidavit in reply, the appellant would have had an
opportunity of placing on record facts showing why and in
what circumstances the appellant came to address the letter
dated June 25, 1970 and establishing that on these facts there
was no waiver by the appellant of its right to exemption under
the assurance given by respondent 4. But in the absence of
such pleading in the affidavit in reply, this opportunity was
denied to the appellant. It was, therefore, not right for the
High Court to have allowed the plea of waiver to be raised
against the appellant and that plea should have been rejected
in limine."
In the present case, plea of waiver had neither been taken in the
original plaint nor in the amended plaint which was amended subsequent
to the passing of the decree on admission for the sum of Rs.7,09,835/-
nor even in the grounds of appeal before the High Court. Question of
waiver is not a pure question of law which could be permitted to be
raised by the appellant at any stage of the proceedings. The High Court
was right in observing that the plea of limitation put up by the Board has
to be examined on its own merit. We do not find any merit in the
submission of the learned senior counsel appearing for the appellant that
the suit having been partly decreed on admission, could not subsequently
be dismissed on the ground of limitation for the remaining amount.
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Second part of Point No.2
Shri R.F. Nariman, learned senior counsel appearing for the
appellant conceded before us the first part of the point no.2 that Section
120 of the Act is applicable in the present case. He addressed on the
second part of question no.2, "whether the letter dated 12.04.1984 can be
treated as notice under Section 120 of the said Act and further whether
the suit is barred by limitation thereunder."
Section 120 of the Act reads as under:-
"Section 120 \026 Limitation of proceedings in respect
of things done under the Act \026 No suit or other proceeding
shall be commenced against a Board or any member or
employee thereof for anything done, or purporting to have
been done, in pursuance of this Act until the expiration of one
month after notice in writing has been given to the Board or
him stating the cause of action, or after six months after the
accrual of the cause of action."
The Major Port Trust Act, 1963 is a special Act and Section 120 of
the said Act provides limitation of proceedings in respect to the things
done under the Act. A perusal of this Section shows there are two
requirements in the Section and both the requirements have to be read
conjunctively and not alternatively. The suit has to be filed within six
months of the accrual of the cause of action and it has to be preceded by
one month notice. Admittedly, in the present case formal notice under
Section 120 had not been issued. It was contended by the learned senior
counsel that requirement of Section 120 of the Act would be satisfied if
the plaintiff before filing the suit complies with one of the two
requirements herein. This submission has been made on the basis that
the word ’or’ occurs between giving of the notice in writing and the
filing of the suit after six months of the accrual of the cause of action.
The Andhra Pradesh High Court in The Shipping Corporation of India
Ltd. Vs. The Union of India and another [(1976) A.P. 261] has taken
the view that the two requirements of the said Section have to be read
conjunctively and not alternatively. That not only the suit has to be filed
after the accrual of cause of action it has to be preceded by one month’s
notice given in the prescribed manner. The word ’or’ employed between
the two clauses in the Section if read alternatively would defeat the very
object and intention of the said provision and would lead to absurdity.
We respectfully agree with the view expressed in the aforesaid judgment
and endorse the same.
Even on facts we find that the letter dated 12.04.1984 cannot be
treated as a notice under Section 120 of the Act. The respondent Board
by its letter dated 06.04.1984 had informed the appellant that the
appellant has become eligible to receive the rebate of Rs.7,09,835/- @
Re.1/- per tonne for having turned over the plot allotted to it 6.39 times
during the financial year 1983-84. In reply thereto, the appellant by their
letter 12.04.1984 set out various arguments to justify the ground for full
rebate and requested for the refund of the entire sum of Rs.62,46,584.10
paise. In reply thereto, the respondent Board by its letter dated
16.06.1984 declined the request of the appellant contained in its letter
dated 12.04.1984. The appellant in para 30 of its plaint has stated that
the illegal levy/refusal of rebate was made on 16.06.1984. Thus the
cause of action arose to the appellant for the first time on 16.06.1984
and, therefore, the letter dated 12.04.1984 by no stretch of imagination
can be said to be a notice under Section 120 of the Act, which requires
the cause of action to be set out in the said statutory notice. In the plaint
there is no averment to the effect that the appellant had given the notice
under Section 120. Appellant in paragraph 31 has taken the stand that
the appellant was not prevented by Section 120 and 121 of the Act from
filing the suit. If that be the case, then the letter dated 12.04.1984 cannot
be treated as a notice under Section 120 of the Act. Requirement of
giving of notice under Section 120 is mandatory and a pre condition to
the filing of the suit, and since the suit was filed without giving the
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notice the same was not maintainable. The cause of action arose to the
appellant on 16.06.1984 and the present suit was filed on 11.09.1986
which is much beyond the period of six months provided for filing the
suit. The suit is thus held to be not maintainable in the present form as
well as barred by limitation.
With reference to point no.3 formulated for determination
regarding the constitutional validity of Section 120 of the Act, it has
been contended by Shri R.F. Nariman, learned senior counsel appearing
for the appellant that the shorter period of limitation of 6 months
prescribed under the Act is unconstitutional and violative of Article 14
and 19 of the Constitution of India as it singles out cases under the Act
without intelligible differentia. It has no nexus with the objective sought
to be achieved under Section 120 of the Act. It was pointed out that in
respect of suits against Government and public officers under other laws,
longer period of limitation has been prescribed and there is no reason
whatsoever to prescribe shorter period of limitation under the Act.
Elaborating this submission further learned senior counsel pointed out
that under the Indian Limitation Act, 1963 there are three divisions of
the schedule to the Act. The first division concerns itself with suits
where the minimum period in the column of limitation is one year going
up to 30 years. In the second division which deals with appeals much
shorter period of limitation is provided ranging from 30 days to 90 days.
Similarly, in the third division relating to filing of applications again a
very short period of limitation is prescribed ranging from 10 days to 90
days. Article 134 to 137 providing for longer periods of limitation are
an exception to the rule. Section 5 of the Limitation Act allows for
condonation of delay in filing the appeals or applications but not suit.
According to him, it is so because the longer period of limitation is
provided for filing the suit and since short period is given for filing of
the appeals and applications, provision has been made for condoning the
delay on sufficient cause being shown to mitigate the hardship caused to
the litigants. That Section 120 which provides for short period of
limitation of six months for filing the suit without prescribing for the
condonation of delay to mitigate the hardship of the litigants is arbitrary,
excessive, disproportionate and unreasonable restriction on the
appellant’s rights under Article 14 and 19(1)(f) of the Constitution of
India. That the High Court wrongly felt bound by two decisions cited
before it. The first being of the Bombay High Court in Municipal
Corporation of Greater Mumbai Vs. Hasham Ismail Mamsa (AIR
1972 Bom. 350) and the other of this Court in the Trustees of the Port of
Bombay Vs. The Premier Automobiles Ltd. & another reported in 1974
(4) SCC 710. So far as Municipal Corporation of Greater Mumbai’s
case (supra) is concerned it was contended that this was not a decision
on the point at all in as much as the counsel for the plaintiff had not
pressed the point regarding constitutional validity of the provision
though the same had been raised. In so far as the Trustees of the Port
of Bombay’s case (supra) it was pointed out that the constitutional
validity of Section 87 of the Bombay Port Trust Act had not been
challenged at all. That the observations made in the aforesaid cases are
in the nature of obiter dicta and therefore connot be treated as a
precedent in the present case.
Before the Bombay High Court in Municipal Corporation of
Greater Mumbai’s case (supra) the challenge had been laid to Section
527 of the Bombay Municipal Corporation Act on the ground that the
same was illegal and ultra vires as it violated the fundamental rights
guaranteed to plaintiff under Article 14 and 19(1)(f) of the Constitution
of India. The learned counsel appearing for the plaintiff did not press
the challenge to the constitutional validity of Section 527 but the
Division Bench found that there was no merit in the contention raised by
the plaintiff to the constitutional validity of Section 527 and observed
that merely because a statute not dealing with limitation in general
prescribed a special period of limitation different from the one in the
Indian Limitation Act, it does not follow that the provision prescribing
the special period of limitation violates Article 14 of the Constitution,
much less Article 19(1)(f) thereof. It was observed in paragraph 9:-
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" xxx
Mr. Adik for the plaintiff did not press the
constitutional point raised in the above paragraph of the
plaint and obviously for good reasons. It is obvious that
there is no substance in that contention. Merely because
a statute not dealing with limitation in general
prescribes a special period of limitation different from
the one in the Limitation Act, it does not follow that the
provision prescribing the special period of limitation
violates Article 14 of the Constitution, much less
Article 19(1)(f) thereof."
No doubt the learned counsel appearing for the plaintiffs in that
case had given up his challenge to the constitutional validity of Section
527 of the Bombay Municipal Act, but all the same the High Court
recorded its reasons for upholding the validity of the Section by
recording valid reasons which in our view are correct. We agree with
the observations made by the Division Bench in the said case that merely
because a statute not dealing with the limitation in general prescribed
period of limitation different from the one in the Indian Limitation Act,
1963 it does not follow that the provisions prescribing the said period of
limitation violates Article 14 or 19(1)(f) of the Constitution of India.
In respect to the judgment of this court in Trustees of the Port of
Bombay’s case (supra) it is urged by the learned senior counsel
appearing for the appellant that the constitutional validity of Section 87
of the Bombay Port Trust Act, 1879 was not under challenge and
therefore the said decision cannot be a precedent for examining the
constitutional validity of Section 120 of the present Act. Section 87
reads as under:-
"Section 87. No suit or other proceeding shall be
commenced against any person for any thing done, or
purporting to have been done, in pursuance of this Act,
without giving to such person one month’s previous
notice in writing of the intended suit or other
proceeding and of the cause thereof, nor after six
months from the accrual of the cause of such suit or
other proceeding..."
It is true that the constitutional validity of Section 87 of the Act
which is equivalent to Section 120 of the present Act and similar in
terms was not directly in issue. Yet this Court examined the question of
shorter period of limitation prescribed under Section 87 of the Bombay
Port Trust Act, 1879. With reference to the relatively longer period of
limitation provided under the Indian Limitation Act for filing of the suit
and after examining the said issue the Court came to the conclusion that
shorter period of limitation provided under Section 87 of the Bombay
Port Trust Act, 1879 was valid. It was observed in para 38:-
"38. If the person entitled to the goods defaults in
removing them within one month of the Board coming
into custody, special powers of disposal by public
auction are given by Section 64A. The Act charges the
port authorities with a wealth of functions and duties
and necessarily legal proceedings follow upon the
defects, defaults and other consequences of abuse of
power. Even so, a public body undertaking work of the
sort which a port carries out will be exposed to an
explosive amount of litigation and the Board as well as
its officers will be burdened by suits and prosecutions
on top of the pressure of handling goods worth crores
daily, public bodies and officers will suffer irremediably
in such vulnerable circumstances unless actions are
brought when evidence is fresh and before delinquency
fades; and so it makes sense to provide, as in many
other cases of public institutions and servants, a
reasonably short period of time within which the legal
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proceedings should be started. This is nothing unusual
in the jurisprudence of India or England and is
constitutionally sound. Section 87 is illumined by the
protective purpose which will be ill served if the shield
of a short limitation operates in cases of misfeasance
and malfeasance, but not non-feasance. The object,
stripped of legalese and viewed through the glasses of
simple sense, is that remedial process against official
action showing up as wrong doing or non-doing which
inflicts injury on a citizen should not be delayed too
long to obliterate the probative material for honest
defence. The dichotomy between act and omission,
however, logical or legal, has no relevance in this
context. So the intendment of the statute certainly takes
in its broad embrace all official action, positive and
negative, which is the operative cause of the grievance.
Although the Act in the present case uses only the
expression ’act’ and omits ’neglect’ or ’default’ or
’omission’, the meaning does not suffer and if other
statutes have used all these words it is more the
draftsman’s anxiety to avoid taking risks in Court, not
an addition to the semantic scope of the word ’act’. Of
course, this is the compulsion of the statutory context
and it may well be that other enactments, dealing with
different subject-matter, may exclude from an ’act’ an
’omission’. This possibility is reduced a great deal by
the definition of ’act’ in the various General Clauses
Acts, as including ’illegal omissions’."
The question of considering the rationale of Section 87 of Bombay
Port Trust squarely arose in the said case as the contention was raised by
the Additional Solicitor General therein that if the argument of the
respondent in the said case was accepted, it would amount to misreading
the purpose of Section 87 of the Bombay Port Trust Act and similar
provision in many statues calculated to protect public officers and
institutions on a special basis. (see paragraph 7 of the judgment). The
Major Port Trusts Act, 1963 charges the port authorities with a well
thought out duties and functions in respect of providing port facilities
and equipment and providing services for receiving, landing and
shipping of goods or passengers from and upon sea going vessels. As a
result of these multifarious functions, major ports and their officers are
faced and burdened with an explosive amount of litigation. The object
of Section 120 is two fold, i.e. provision of giving one month’s notice
setting out the cause of action is to give the port authorities an
opportunity to consider the merits of the case of the aggrieved party land
make amends when possible to save litigation. To ensure that legal
action against port authorities and its officers is initiated expeditiously
when evidence is fresh land does not obliterate the probative material
for honest defence.
The classification has a reasonable nexus to the object, it seeks to
achieve. The submission made on behalf of the appellant that though a
suit may be filed within six months, the trial of the suit could take place
long after this and that the evidence would never be fresh at that stage is
fallacious in as much as once the suit is filed against a party, the party is
put on notice and will, therefore, gather the relevant documentary
evidence when fresh and preserve such evidence for the trial whenever
the same would take place.
The submission of Shri R.F. Nariman, learned senior counsel
appearing for the appellant that in Indian Limitation Act, 1963 no
provision for condonation of delay for institution of a suit has been made
because a relatively longer periods of limitation has been provided as
compared to limitation provided for appeals and other applications and,
therefore, providing relatively shorter period of six months for filing the
suit under the provisions of Section 120 of the Major Port Trusts Act,
1963 without a provision for condonation of delay, would make the
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section arbitrary, excessive, disproportionate and unreasonable
restriction on the appellant’s right under Article 14 and 19(1)(g) of the
Constitution of India cannot be accepted. The statute of limitation is
founded on public policy that an unlimited and perpetual threat of
litigation leads to disorder and confusion and creates insecurity and
uncertainty. Therefore the legislature has sought to balance the public
interest in providing limitation on the one hand and at the same time not
to unreasonably restrict the right of a party to initiate proceedings on the
other. Once a suit is filed the object of limitation as a statute repose is
satisfied in as much as the opponent party knows what he has to defend.
The Major Port Trusts Act, 1963 is a special Act. It is a settled legal
proposition that the provision of the Special Act shall prevail over with
the general Act. Section 29 of the Indian Limitation Act, 1963 relates to
savings. For proper appreciation of legal position Section 29(2) of the
Limitation Act is reproduced below:-
"Section 29(2) \026 Where any special or local law
prescribes for any suit, appeal or application a period of
limitation different from the period prescribed by the
Schedule, the provisions of Section 3 shall apply as if
such period were the period prescribed by the Schedule
and for the purpose of determining any period of
limitation prescribed for any suit, appeal or application
by any special or local law, the provisions contained in
Sections 4 to 24 (inclusive) shall apply only in so far as,
and to the extent to which, they are not expressly
excluded by such special or local law."
Sub-Section 2 of Section 29 envisages special or local laws which
can provide a period of limitation for suits as well as for appeals and
applications, different from the period prescribed by the schedule of
Limitation Act where provisions contained in Sections 4 to 24 can be
expressly excluded by such special or local laws. There are many
special or local laws which provide for a short period of limitation for
filing of appeals as well as applications and where the provisions of
Section 5 are expressly excluded or curtailed. Under the Arbitration and
Conciliation Act, 1996, Section 34 prescribes time limit within which an
application for setting aside of an award must be made and although the
Court is given the power to extend the time on sufficient cause being
shown, the said power to extend the time is restricted but a period of 30
days only and not thereafter.
It was then submitted by learned senior counsel for the appellant
that whereas Section 120 of the Major Port Trusts Act prescribes a
limitation for six months plus one month of statutory notice for suits
filed against the Port Trust and its employees for anything done or
purporting to have been done in pursuance of the Act, no limitation is
prescribed for suits which are filed by the Port Trust under Section 131
of the same Act without a rational basis. We do not find any merit in
this submission. It is well settled that although limitation being intended
for quieting title and in that sense looks at the problems from the point of
view of the defendant with a view to provide him security against the
stale claims, addresses itself at the same time also to the position of the
plaintiff. The legislature in its wisdom can make separate provision
within which a suit must be filed by the individual from that within
which a suit can be filed by a statutory body. In Nav Ratanmal Vs.
State of Rajasthan (AIR 1961 Supreme Court 1704 a similar argument
was raised and negatived by this Court. In that case the Court was
examining as to whether there was a rational basis for treating the
Government differently as regards period within which the suit could be
filed by the Government on the one hand and the private individual on
the other. It was held that there were sufficient grounds for
differentiating between the claims of an individual and the claims of the
Government and the actual period of limitation which should be allowed
for filing the suit by any party was a matter of legislative policy and
cannot be brought within the scope or purview under Article 14 or any
other Article of the Constitution. It was observed:-
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"xxxx. It is with this background that the question of
the special provision contained in Article 149 of the Act
has to be viewed. First, we have the fact that in the case
of the Government if a claim becomes barred by
limitation, the loss falls on the public, i.e., on the
community in general and to the benefit of the private
individual who derives advantage by the lapse of time.
This itself would appear to indicate a sufficient ground
for differentiating between the claims of an individual
and the claims of the community at large. Next, it may
be mentioned that in the case of governmental
machinery, it is a known fact that it does not move as
quickly as in the case of individuals. Apart from the
delay occurring in the proper officers ascertaining that a
cause of action has accrued, Government being an
impersonal body, before a claim is launched there has to
be inter-departmental correspondence, consultations,
sanctions obtained according to the rules. These
necessarily take time and it is because of these features
which are sometimes characterised as red-tape that there
is delay in the functioning of Government offices."
With reference to the contention of Shri R.F. Nariman, learned
senior counsel appearing for the appellant that there is no reasons for
prescribing a shorter period of limitation for action against the Board
while suits against the Government can be filed within normal period of
limitation, it may be stated that the Government cannot be equated with
statutory body like the Major Port Trust. The Government is a vast
organisation having comparatively larger manpower and in the litigation
against the Government subject matter of disputes is under several
different acts, such as Excise Act, Customs Act, Income Tax Act,
Railways Act, Land Acquisition Act etc. Many of these Acts also
contain provisions similar to, if not identical with the provisions of
Section 120 of the Major Port Trusts Act, 1963. Therefore, the
contention between a major port and Government as a whole is totally
fallacious.
A provision of the Act providing for a shorter period of limitation
cannot be declared to be unconstitutional simply because in some of the
Statutes a longer period of limitation has been prescribed for the
redressal of the litigants grievances. The legislation enacted for the
achievement of a particular object or purpose need not be all embracing.
It is for the legislature to determine what categories it would embrace
within the scope of legislation and merely because certain categories
which would stand on the same footing as those covered by the
legislature are left out would not render the legislation of any law being
discriminatory and violative of the fundamental rights guaranteed under
Article 14 and 19(1)(g) of the Constitution.
In the end Mr. Nariman submitted that the Indian Ports Act, 1908
was still applicable to various ports including Panjim Port in Goa. In the
case of exporters like the appellant using the port of Panjim, if the same
controversy was to arise there being no provision such as Section 120 of
the Major Port Trusts Act, 1963 in the Indian Ports Act, 1908 the period
of limitation available to such exporters would be three years, that there
was no intelligible differentia with the objects sought and achieved in
proceeding such as the provision as Section 120. It may be stated that
nowhere in the pleadings, is there an averment regarding the port of
Panjim and in any case the very fact that the port of Panjim is not a
major port and is not governed by the Major Port Trusts Act, 1963 and is
not enjoined to perform duties which a major port is enjoined to perform
is enough of an intelligible differentia which has a rational nexus with
the objects sought to be achieved.
For the aforesaid reasons, we do not find any merit in these
appeals and the appeals are dismissed leaving the parties to bear their
own costs.